It’s easy to feel powerless these days. Jobs are scarce and insecure, wages are flat, fuel prices are soaring, rents are going up and all the while the rich keep getting richer. At my age, it’s tempting to leave it to someone else to fix. But as a parent and a patriot, I can’t and I won’t. An entire generation of Brits is being left behind. 1 in 5 young people are unemployed. Those who can find work often end up in part-time, poorly paid, dead end jobs. Then there’s the significant matter of putting a roof over their heads. There’s a chronic lack of social housing and most young people don’t have a hope in hell of getting a foot on the property ladder, especially when the majority of jobs are being created in and around London where the average mortgage deposit for a first time buyer is projected to hit £100,000 by 2020.
That’s no typo. It really is one hundred thousand pounds. Talk about a hefty punch in the face.
For centuries, the British tax system has been rigged to benefit wealthy land owners. It’s no surprise then that 70% of the land in the country is owned by 1% of the population. The majority (i.e. the working classes and the squeezed middle classes) put up with the arrangement so long as children had a good shot at a better life than their parents. But all that’s changed now. We have reached a dangerous tipping point in our economy. Our children face a future of declining living standards. The lucky ones will claw their way into social housing while the rest will be condemned to either live rough or spend their lives beholden to rich landlords who bleed them dry.
We don’t have to stand by while our children are railroaded into serfdom. We are not powerless. We can make affordable housing a reality, and boost the economy in the process. By demanding a LAND VALUE TAX.
A LAND VALUE TAX or LVT is an annual tax on the value of a plot of land. Unlike VAT, income tax, council tax and business rates which hit people of modest means the hardest, an LVT shifts the tax burden to the wealthiest land owning members of society. As things stand now, land owners do not pay taxes on land they haven’t developed, which means they have everything to gain by sitting on real estate instead of putting it into productive use by building houses or businesses on top of it. It’s a simple study in supply and demand. The fewer houses/buildings there are the more valuable the existing stock becomes. This is precisely why we have housing bubbles. A LAND VALUE TAX would change everything by unlocking the value of the nation’s vast tracks of under-utilized real estate. Hoarding would become very unprofitable, forcing land owners to either sell to developers or build on it themselves. As the housing stock increases, prices would drop, recapturing the dream of home ownership for the nation’s youth. And all that building would kick start the economy by creating much needed jobs, not to mention providing an incentive to improve our crumbling infrastructure which would make us more competitive.
Affordable housing. More jobs. Economic growth. Competitiveness. That’s what a LAND VALUE TAX can do for us. And unlike other forms of taxation, this one is very tough for the rich to dodge. You can’t hide a piece of land offshore.
The LVT is not a new idea. It was first floated to parliament back in 1909, but the British aristocracy blocked it and they have been throwing up spanners ever since. But now that our economy is in such dire straits, the LVT is finally gaining support on both sides of the political divide. Liberals like it because it’s fair and progressive, while enlightened free-market conservatives embrace its potential to unlock economic value and makes us more competitive. The Lib Dems have even formed a pressure group, ALTER, to push for an LVT.
The most significant development is the Land Value Tax bill currently winding its way through Parliament. Introduced by Green MP Caroline Lucas, the private member’s bill calls for a feasibility study on LVT—the first crucial step toward making it a reality. Miraculously, this bill is still alive and kicking despite an early Parliamentary debate in which Exchequer Secretary David Gauke (the conservative Minister with strategic oversight of the UK tax system who responds to questions on the bill), refused to even consider the benefits of an LVT.
We have the power to make him consider it. The bill is set for another reading next month, so if you believe in an LVT, CONTACT YOUR LOCAL MP, tell them you support the LAND VALUE TAX bill, and to voice your position to Mr Gauke. As your elected representative, your MP has a duty to take up your request.
This is our best shot in a century to end the gross inequalities in our tax system and force wealthy land owners to finally pay their fair share. Please do not stand by while our country sleep walks back into feudalism. Exercise your voice, rescue our economy and create a better future for all of our children.